KAPA open to probe amid investment scam allegations

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Metro Manila (CNN Philippines, June 11) — Religious group Kapa-Community Ministry International, Inc. (KAPA) said it is open to investigations, denying that its founder Pastor Joel Apolinario is running an investment scam.

KAPA currently has a 10-million base, according to member and Ahon sa Kahirapan Movement convenor Danny Mangahas. Majority of them are overseas Filipino workers and urban poor residents.

Short for Kabus Padatoon [translation: making the poor rich], KAPA receives donations from its members. In exchange, donors are promised a 30 percent monthly return — called "love gifts" or "monthly blessings" — for life.

Mangahas, who has been part of KAPA for four months now, said members have profited from the arrangement which had them questioning why the government is suddenly interfering.

"Ang hindi lang namin maintindihan, kelan pa naging masama na ang isang ministry ay tutulong mismo diretso sa mga miyembro niya? [Translation: What we don't understand is when did it become a crime for a ministry to help its members directly?]," Mangahas told CNN Philippines' Newsroom Ngayon.

"Bukas naman po kami sa imbestigasyon, bukas naman po ang aming founder na buksan ang aming mga opisina [We are open to investigation, our founder is ready to open the doors of our offices]," he added.

The Court of Appeals has frozen all bank accounts and properties linked to KAPA upon the request of the Securities and Exchange Commission (SEC). The regulator revoked KAPA's registration papers in April after discovering that it was operating a Ponzi-type investment scam, which relies on recruiting new members to cover the payouts.

With the freeze order in place, KAPA and its officials cannot make withdrawals or fund transfers through the covered bank accounts.

On Monday, the Philippine National Police has also raided KAPA's offices in Tacloban City; Taytay, Rizal; Compostela, Cebu; Tagum City; Opol, Mislamis Oriental; and even Apolinario's house in General Santos City. The National Bureau of Investigation (NBI) said it deployed 14 teams to simultaneously serve search warrants in 14 locations, as granted by the Manila Regional Trial Court.

Antonio Pagatpat, NBI deputy director for regional operations service, said the searches were done for KAPA's supposed violations of the Securities Regulation Code, which requires any group or company to secure a license from the SEC before engaging in any kind of investment activity. He added KAPA is not a religious group as it claims.

"From day one up to the time na it was ripe for operations, not a single religious activity was conducted by the organization. In fact, tinatanggap nila lahat kung saan ka man nanggaling na sektor ng relihiyon basta may donasyon ka [They are accepting anyone as a member provided that they have a donation]," Pagatpat said in a media briefing. "Ang donasyon ay wala kang ine-expect na return... Dito, guaranteed ang 30 percent na interest a month."

The operations were originally set for June 20, but the NBI had to fast-track it upon Duterte's orders. They were able to seize documents, books and equipment to prove that KAPA did get money from its members.

NBI agents also tried to join KAPA to investigate. They found that the group accepts anyone regardless of their religious background, with their donation being the only requirement.

Pagatpat also revealed that KAPA gives a five percent commission to members who "assist" new recruits in handing in their money.

Mangahas said simultaneous prayer rallies will be staged by KAPA members on Wednesday in parts of the country, to be highlighted by a gathering at EDSA Shrine where he expects at least 300,000 to come together.

Jealous?

President Rodrigo Duterte ordered the shutdown of KAPA and similar investment scams on Saturday. Presidential Spokesperson Salvador Panelo said victims of this scheme can file cases to recover their money.

But Mangahas said none of their current members are complaining about being scammed, claiming that their lives have instead improved as they receive the promised returns. He explained that their donations grow as their pastor invests the money in the numerous businesses which their founder runs.

He went as far as saying that the state crackdown on KAPA might have stemmed from competition, with the new group also recruiting members in Mindanao where Duterte's friend Pastor Apollo Quiboloy's organization is also based.

"Baka ito na 'yung payback. Kasi alam natin na 'yung Pastor Quiboloy, malapit naman talaga sa Pangulo ito. Mas pumutok po kasi sa Mindanao 'to eh. Parang mas maraming naniniwala sa KAPA," Mangahas said during a media briefing Tuesday morning.

[Translation: Maybe this is the payback. As we know, Pastor Quiboloy is close to the President. But this became more popular in Mindanao, it's like more people believe in KAPA.]

Quiboloy, who calls himself the "Appointed Son of God," is the founder of religious group Kingdom of Jesus Christ. Duterte's order to shut down KAPA and similar schemes was made during his interview with Quiboloy on the religious leader's TV station Saturday.

The NBI said Apolinario was not in his house when the police visited his home in General Santos City yesterday. Authorities have no information yet if he has fled the country, but Pagatpat said Apolinario previously faced estafa charges for a similar modus in Bislig, Surigao del Sur about two years ago. These charges were settled after the pastor opted for settlement with the complainants, the NBI official said.

Payouts 'ridiculous'

SEC Chairman Emilio Aquino maintained that KAPA runs an illegal investment scheme, as he exposed that the supposed hospital, school, and other businesses owned by Apolinario were only registered with authorities earlier this year.

KAPA registered with the SEC in March 2017 and declared only ₱465,000 worth of assets for that year.

Aquino said KAPA's promises were "ridiculous," noting that there was no way to guarantee the returns other than through getting funds from new recruits.

"While there may be payouts being given now, pero the money being used for payouts are really money from new investors. Talagang Ponzi po ito," Aquino said in a separate interview.

He added that the SEC is looking to file charges as KAPA appears to have violated provisions of the Securities Regulation Code. Aquino said the deed of donation papers signed by KAPA members are actually investment contracts, which by law must be registered with the SEC.

"We have to put a stop to this because if we don't, more people will be victimized," the SEC chair added. "If we wait for it to collapse — which we are sure would collapse kahit hindi tayo mag-intervene — mas marami nang mga biktima ito."

Once complainants come forward, the NBI said Apolinario and KAPA officers may also face syndicated and large-scale estafa, which is a non-bailable offense.

CNN Philippines Correspondent Xianne Arcangel contributed to this report.